Abstract

Labor market outcomes in Macedonia have been improving in the past eight years, despite the lingering effects of the Global economic crisis. The unemployment rate has been declining, albeit still remains high at 26.1% at the end of 2015. At the same time, the employment rate increased from 36.2% in 2007 to 42.1% in 2015. In spite the favorable developments related to the employment and unemployment rates, the activity rate continued to be the main challenge. Activity rate improved moderately, from 55.7% in 2007 to 57% in 2015, being still much lower than the EU-28 average of 72.4%. In order to tackle the high unemployment and inactivity, the government introduced ALMPs in 2017, with key objectives: 1) social inclusion of vulnerable groups on the labour market, 2) reducing unemployment, 3) increasing employability of the long-term unemployed people, and 4) fostering competitiveness of the economy. The ALMPs include four main categories: 1) direct job creations; 2) employment incentives; 3) traineeship; and 4) community work. The main objective of this research is to investigate the success of the ALMPs and its impact to the unemployment rate in the country.